Bulgaria, Sappi sell notes; softer day for EM; weakness in oil names; Russia, Brazil in focus

By Christine Van Dusen

Atlanta, March 15 – Bulgaria and South Africa’s Sappi Ltd. were among the issuers to print new notes on a softer Tuesday for emerging markets assets.

“Following weeks of steadily increasing or stable oil prices, the trend has started to reverse as a consequence of refreshed doubts on the tentative production freeze agreement,” a strategist said. “A meeting in March is now unlikely, but several OPEC delegates now see April as more likely and a renewed price drop will add further pressure to an assertive stance from OPEC and non-OPEC producers.”

“There was definite weakness in oil-related names, and we had sellers across Kazakhstan and Azerbaijan,” a trader said.

Also contributing to the larger picture was the news that Russian President Vladimir Putin was withdrawing troops from Syria, saying that their objectives had been met.

In other news from Russia, European officials have reportedly warned banks not to participate in a planned bond deal from the sovereign, a strategist said.

“Officials said that the proceeds could be misused,” he said. “Russia previously said that it would proceed with its plans. This might now become more difficult if European banks also shy away.”

From Latin America, bonds were “overbought” on Tuesday, a New York-based trader said.

Brazil received attention on Tuesday, after President Dilma Rousseff named her predecessor to her cabinet and coped as a minister faced new allegations. In response, Brazilian bank bonds moved lower, a trader said.

Paul A. Harris contributed to this article.

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